CRPC Required Minimum Distributions and Beneficiary Planning 2

Question 1

Under the SECURE Act, within what maximum time period must most non-spouse beneficiaries fully distribute an inherited IRA?

Accepted Answer

10 years

Answer

5 years

Answer

The beneficiary's single life expectancy

Answer

20 years

Question 2

Which of the following individuals qualifies as an 'Eligible Designated Beneficiary' (EDB) under the SECURE Act, allowing use of the life expectancy stretch?

Accepted Answer

A chronically ill individual

Answer

An adult child of the account owner who is not disabled

Answer

A trust named as beneficiary

Answer

A grandchild of the account owner

Question 3

Which unique option does a surviving spouse beneficiary have when inheriting a deceased spouse's IRA that other beneficiaries do not?

Accepted Answer

Rolling over the inherited IRA directly into their own IRA

Answer

Taking distributions over a 10-year period tax-free

Answer

Disclaiming the inheritance within 18 months

Answer

Converting the inherited IRA to a Roth without income limits

Question 4

If an IRA owner dies before their Required Beginning Date with no named beneficiary, what distribution rule generally applies?

Accepted Answer

5-year rule

Answer

10-year rule

Answer

Single life expectancy of the estate executor

Answer

Distributions must begin within 90 days

Question 5

What is a 'see-through trust' (or 'look-through trust') in the context of IRA beneficiary planning?

Accepted Answer

A trust meeting IRS requirements so its individual beneficiaries are treated as designated beneficiaries for RMD purposes

Answer

A trust allowing beneficiaries to view IRA assets before distribution

Answer

A trust that is transparent to creditors for asset protection

Answer

A charitable remainder trust designed to receive IRA distributions

Question 6

When an original IRA owner dies after their Required Beginning Date and leaves the account to a non-spouse beneficiary subject to the 10-year rule, what does IRS guidance require regarding annual distributions?

Accepted Answer

Annual RMDs must be taken in years 1 through 9, with any remaining balance distributed by end of year 10

Answer

No annual distributions are required; the full balance must simply be withdrawn by end of year 10

Answer

RMDs are only required in years 5 through 10

Answer

The beneficiary may choose any schedule as long as the account is empty by year 10

Question 7

What is a 'qualified disclaimer' and why might an IRA beneficiary use one?

Accepted Answer

An irrevocable refusal of inherited assets within 9 months, causing them to pass to the contingent beneficiary

Answer

A legal document disclaiming tax liability on inherited IRA distributions

Answer

A statement by a charity accepting a qualified charitable distribution

Answer

A form filed with the IRS to extend the 10-year distribution period